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mysterious-prophetess · 4 years

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Top Five Academic and Publishing Scandals of the last Decade

So, I’ve seen people do stuff like this, a round up of sorts and the 2010′s were an insane decade to be alive.

So, I thought I’d compile my personal favorite publishing and academic scandals

Note: This will concern only things that were actually published or a scandal to do with Academia. The Rose Christo incident with the infamous fanfic didn’t have the biography make it to print so it’s right here as a Dishonorable Mention. No sources, because this was a home-grown tumblr disaster (much like Dashcon).

So,

#5 That Book that Used Scammy Tactics to Become a Best Seller Before Anyone Ever Even Read It.

Remember that time when Handbook for Mortals used shady tactics to make it look like it was selling better in pre-sales than it actually was? I barely remembered it, but then as I was adding in our Dishonorable Mention, I suddenly had the thought of “remember that...” so here it is at #5 since this book was actually published, and it was allegedly terrible. It has 3 stars on Amazon, but with its past, I can’t even trust that.

I didn’t read it. I had, and still have, better things to do than to read subpar fantasy that tried to be the next Hunger Games/Harry Potter/Divergent.

It turns out, if you have wealthy enough collaborators, or people who know how to game the system by which the NYT Bestsellers’ List operates, you too can buy and cheat your way onto that list with a terribly written book like these guys.

What’s even more ridiculous was there were already talks of a movie version and this unknown writer turned out to be, surprise, an actress too! And guess who’d be playing her own main character in the movie? The author! So, once this was unraveled as being a bulk-book-buying-cheat-tactic-to-get-on-the-NY Times-Bestseller-List, they lost their rank and were completely off the list. The movie is also toast, I think, since it would have come out in 2018. We’re now in 2020.

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#4: That time Bethesda Plagiarized Dungeons and Dragons.

That’s right folks. Bethesda, who cannot catch a break after their hilariously disastrous launch of their ongoing garbage fire, Fallout 76, were in trouble whenever they released a TTRPG module for an Elder Scrolls game that was suspiciously like a previously released Dungeons and Dragons adventure...because it was very much ripped off from the D&D book.

There were articles highlighting just how they did this and how blatant it was.

Some articles would do a side-by-side of huge chunks of the text and, yikes, that’s some obvious copy-pasting.

Suffice to say, they yanked this e-book down ASAP. (x) (xx) (xxx) (xxxx)

#3 That Time a Youtuber Turned Professional Games Media Editor Plagiarized for Most of His Career and Only Got Caught After He Plagiarized the Wrong Person on a Very Public Platform

So, yeah. There was a review last year for a game called Dead Cells (published by Motion Twin). On July 24, 2018 a smaller Youtube channel called Boomstick gaming would upload their review to the game. Then August 6th, IGN’s Nintendo editor would post “his” review up and Deadite from Boomstick Gaming, who was actually a fan of IGN, noticed a lot of eerie similarities between the reviews. He did a side-by-side video comparison (here) and it looks like a case of barely even changing the words around after copying someone else’s homework. As an English major, this is a clear-cut case of plagiarism. IGN agreed too, as did most of the internet. This reviewer had fans who still believe in him even after he’s been proven a plagiarist but, no accounting for taste am I right? And this would have been the end of it....had he just accepted his fate and just slunk off into the dark recesses of the internet.

But, then he had to provoke both Jason Schrier of Kotaku AND the Internet in a now deleted non-apology video to “looking as hard as you’re able, you won’t find anything.”

Yeah. That didn’t end well for him. So, people went digging and found a shitton of evidence he was a serial plagiarist. No shock to me, because plagiarism is never something a plagiarist ever does just “once.” He’d ripped off his fellow IGN reviewers as well as forum posts and articles from other publications. He also plagiarized a resume template. Now, when you use one of those, you’re SUPPOSED to mimic the style, put place your own information, right? Well, he didn’t even do that.

Link to YongYea, a youtuber who covered the topic in depth. He has his videos on the topic in a playlist. (x)

#2 The Professor Who P-Hacked His Results to Pieces

Now if you don’t know or remember who Professor Brian Wansink is, he’s a former faculty member at Cornell who rose to fame with his papers on nutrition and people’s eating habits. I’m still not entirely sure how a guy whose degrees were not in nutrition OR psychology ended up being the face of this field that seemed to have a lot more to do with nutrition and psychology, but here we are. His degrees were, in fact, a B.S. in business administration from Wayne State College, an M.A. in journalism and mass communication from Drake University, and a PhD in Marketing-Consumer behavior- from Stanford. In a move that one might call pure hubris or just complete and total social ignorance, he made a blog post that started to bring eyes on his work. Thanks to the efforts of other scientists (Like the Skeptical Scientist) and Heathers and Brown as well as the computer programs GRIM and GRIMMER, it was found the man who was cited over 200,000 times was a fraud. As of now 17 papers have been retracted and 15 have been corrected. He is no longer employed at all by Cornell, resigning a disgrace to his field and his former place of work.

The only reason he managed to get so big was he was able to make his so-called science digestible for the masses and able to give his works palatable titles. Ok, I’m done with the food puns. He was a superstar (even worked with the previous first lady on her health initiatives), which is why his fall is also meteoric. This is why you don’t torture your data into false positives, folks. Also, he’d target science journals that weren’t as prestigious and therefore wouldn’t have as rigorous a peer-editing process, allegedly.

His actions have brought thousands of papers into jeopardy and destabilized his whole entire field because nothing he did was reproducible and that’s already a huge problem in science.

(x) (xx) (xxx) (xxxx) (X) (XX)

And.... now for the worst Academic Scandal of the 2010′s....

#1 The College Admission’s Scandal

Because despite Wasink’s damage to his field (because now there are literally thousands of papers who cited him in jeopardy), and two separate cases of Plagiarists on this list, I really can’t help but feel this has to be one of the biggest College/Academia scandals of ALL TIME. Sure, it’s old news now but I’m recapping it because that’s what this list is for. So, A bunch of wealthy people who wanted their children to go to prestigious universities wanted a guarantee that just buying a new wing for the library/science buildings/etc wouldn’t get them. You know, the normal way the super rich buy their children’s ways into schools. Instead, they went to this guy Singer whose group masqueraded as a charity (and that’s what got their asses nailed) and facilitated bribery, cheating, and deception. They caught one of these parents who’d gotten their children in with Singer’s plans for a different crime, and he offered to squeal on Singer and his plot for leniency with his other charges.

Singer’s plan usually involved bribing coaches to get these undeserving students recruited for sports teams (and therefore displacing an actual athlete who should have gotten their spot) as well as having people alter SAT scores and other deceptive actions.

It’s unknown if, at this time, any of these children of the 34 charged parents, actually managed to graduate with degrees from any of these institutions. However, those that had any of these students have to now decide what to do with them since these admissions are now verifiably fraudulent. Some are going to whole-sale kick them out or “cancel their admission” and others aren’t speaking up, and one has already decided the student gets to stay. Because they might not have known what their parents did, and its possible for the ones whose parents DIDN’T have them fake athleticism to not know what their mom and dad did. Hell, even most of the fake athletes might not have known thanks to reports of photo shopping their faces onto uniformed bodies. I do not know if any of these children were in on what their parents did, thought I suspect some might have been, but that’s merely speculation on my part. At the end of the day, it’s up to each affected university to carry out what they wish to do next.

The fact they made donations to a fake charity (and therefore skirted the tax man) are the reason they’re REALLY in deep shit. You don’t deny the IRS its money or the IRS will come for your blood. Just ask the ghost of Al Capone.

(x) (xx) (xxx)

So those are my top 5 Publishing and Academic Scandals of the past Decade.

#long #top five publishing and academic scandals of the past decade #2010s

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essaywriting011-blog · 6 years

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How has the industry in which Nike resides been doing over the last 5 years?

New Post has been published on https://essays-writing.us/nike-case-studies/

How has the industry in which Nike resides been doing over the last 5 years?

Case studies are an important learning strategy in business classes as they provide an opportunity for you to critically analyze events that have taken place in real-life businesses. This develops your critical thinking and research skills as you research the competition and industry in which your business resides with an end goal of formulating a recommendation for the challenges faced by the company.

Nike (pp. 30–31)

1. How has the industry in which Nike resides been doing over the last 5 years?

2. What are the pros, cons, and risks associated with Nike’s core marketing strategy? How have they managed to develop a strong customer relationship with their target market?

3. Who are the top three competitors of Nike, and what are their advantages/disadvantages with respect to their product/service development?

4. Looking at the competitors you discussed in question #3, what would you recommend as being the next steps for these competitors and, subsequently, the next steps for Nike to combat these competitors?

In formatting your case analysis, do not use the question-and-answer format; instead, use an essay format with subheadings. Your APA-formatted case study should be a minimum of 500 words in length (not counting the title and reference pages). You are required to use a minimum of three peer-reviewed, academic sources that are no more than 5 years old (one may be your textbook). All sources used, including the textbook, must be referenced; paraphrased material must have accompanying in-text citations.

Marketing Excellence Nike

Nike hit the ground running in 1962. Originally known as Blue Ribbon Sports, the company focused on providing high-quality running shoes designed for athletes by athletes. Founder Philip Knight believed high-tech shoes for runners could be manufactured at competitive prices if imported from abroad. Nike’s commitment to designing innovative footwear for serious athletes helped build a cult following among U.S. consumers.

Nike believed in a “pyramid of influence” where the preferences of a small percentage of top athletes influenced the product and brand choices of others. Nike’s marketing campaigns have always featured accomplished athletes. For example, runner Steve Prefontaine, the company’s first spokesperson, had an irreverent attitude that matched Nike’s spirit.

In 1985, Nike signed up then-rookie guard Michael Jordan as a spokesperson. Jordan was still an up-and-comer, but he personified superior performance. Nike’s bet paid off—the Air Jordan line of basketball shoes flew off the shelves and revenues hit more than $100 million in the first year alone. As one reporter stated, “Few marketers have so reliably been able to identify and sign athletes who transcend their sports to such great effect.”

In 1988, Nike aired the first ads in its $20 million “Just Do It” ad campaign. The campaign, which ultimately featured 12 TV spots in all, subtly challenged a generation of athletic enthusiasts to chase their goals. It was a natural manifestation of Nike’s attitude of self-empowerment through sports.

As Nike began expanding overseas, the company learned that its U.S.-style ads were seen as too aggressive in Europe, Asia, and South America. Nike realized it had to “authenticate” its brand in other countries, so it focused on soccer (called football outside the United States) and became active as a sponsor of youth leagues, local clubs, and national teams. However, for Nike to build authenticity among the soccer audience, consumers had to see professional athletes using its product, especially athletes who won.

Nike’s big break came in 1994 when the Brazilian team (the only national team for which Nike had any real sponsorship) won the World Cup. That victory transformed Nike’s international image from a sneaker company into a brand that represented emotion, allegiance, and identification. Nike’s new alliance with soccer helped propel the brand’s growth internationally. In 2003, overseas revenues surpassed U.S. revenues for the first time, and in 2007, Nike acquired Umbro, a British maker of soccer-related footwear, apparel, and equipment. The acquisition made Nike the sole supplier to more than 100 professional soccer teams around the world and boosted Nike’s international presence and authenticity in soccer. The company sold Umbro in 2012 for $225 million.

In recent years, Nike’s international efforts have been focused on emerging markets. During the 2008 Summer Olympics in Beijing, Nike honed in on China and developed an aggressive marketing strategy that countered Adidas’s sponsorship of the Olympic Games. Nike received special permission from the International Olympic Committee to run Nike ads featuring Olympic athletes during the games. In addition, Nike sponsored several teams and athletes, including most of the Chinese teams. This aggressive sponsorship strategy helped ignite sales in the Asian region by 15 percent.

In addition to expanding overseas, Nike has successfully expanded its brand into many sports and athletic categories, including footwear, apparel, and equipment. Nike continues to partner with high-profile and influential athletes, coaches, teams, and leagues to build credibility in these categories. For example, Nike aligned with tennis stars Maria Sharapova, Roger Federer, and Rafael Nadal to push its line of tennis clothing and gear. Some called the famous 2008 Wimbledon match between Roger Federer and Rafael Nadal—both dressed in swooshes from head to toe—a five-hour Nike commercial valued at $10.6 million.

To promote its line of basketball shoes and apparel, Nike has partnered with basketball superstars such as Kobe Bryant and LeBron James. In golf, Nike’s swoosh appears on many golfers but most famously on Tiger Woods. In the years since Nike first partnered with Woods, Nike Golf has grown into a $523 million business and literally changed the way golfers dress and play today. Tiger’s powerful influence on the game and his Nike-emblazoned style has turned the greens at the majors into “golf’s fashion runway.”

Nike is the biggest sponsor of athletes in the world and plans to spend more than $3 billion in athletic endorsements between 2012 and 2017. The company also has a history of standing by its athletes, such as Tiger Woods and Kobe Bryant, even as they struggle with personal problems. It severed its relationship with Lance Armstrong in 2012, however, after strong evidence showed that the cyclist doped during his time as an athlete and while competing during all Tour de Frances. Nike released a statement explaining, “Nike does not condone the use of illegal performance enhancing drugs in any manner.” Prior to the scandal, the company had helped develop Armstrong’s LIVESTRONG campaign to raise funds for cancer. It designed, manufactured, and sold more than 80 million yellow LIVESTRONG bracelets, netting $500 million for the Lance Armstrong Foundation.

While Nike’s athletic endorsements help inspire and reach consumers, its most recent innovations in technology have resulted in more loyal and emotionally connected consumers. For example, Nike’s lead in the running category has grown to 60 percent market share thanks to its revolutionary running application and community called Nike+ (plus). Nike+ allows runners to engage in the ultimate running experience by seeing their real-time pace, distance, and route and by giving them coaching tips and online sharing capabilities. Nike expanded Nike+ to focus on key growth areas like basketball and exercise and recently launched Nike+ Basketball, Nike+ Kinect, and Nike+Fuelband, a bracelet/app that tracks daily activities.

Like many companies, Nike is trying to make its company and products more eco-friendly. However, unlike many companies, it does not promote these efforts. One brand consultant explained, “Nike has always been about winning. How is sustainability relevant to its brand?” Nike executives agree that promoting an eco-friendly message would distract from its slick high-tech image, so efforts like recycling old shoes into new shoes are kept quiet.

As a result of its successful expansion across geographic markets and product categories, Nike is the top athletic apparel and footwear manufacturer in the world. In 2014, revenues exceeded $27 billion, and Nike dominated the athletic footwear market with 31 percent market share globally and 50 percent market share in the United States. Swooshes abound on everything from wristwatches to skateboards to swimming caps. The firm’s long-term strategy, however, is focused on running, basketball, football/soccer, men’s training, women’s training, and action sports.

Questions

1. What are the pros, cons, and risks associated with Nike’s core marketing strategy?

2. If you were Adidas, how would you compete with Nike?

Sources: Justin Ewers and Tim Smart, “A Designer Swooshes In,” U.S. News & World Report, January 26, 2004, p. 12; “Corporate Media Executive of the Year,” Delaney Report, January 12, 2004, p. 1; Barbara Lippert, “Game Changers: Inside the Three Greatest Ad Campaigns of the Past Three Decades,” Adweek, November 17, 2008; “10 Top Nontraditional Campaigns,” Advertising Age, December 22, 2003, p. 24; Chris Zook and James Allen, “Growth Outside the Core,” Harvard Business Review, December 2003, p. 66; Jeremy Mullman, “NIKE; What Slowdown? Swoosh Rides Games to New High,” Advertising Age, October 20, 2008, p. 34; Allison Kaplan, “Look Just Like Tiger (until You Swing),” America’s Intelligence Wire, August 9, 2009; Reena Jana and Burt Helm, “Nike Goes Green, Very Quietly,” BusinessWeek, June 22, 2009; Emily Jane Fox and Chris Isidore, “Nike Ends Contracts with Armstrong,” CNNMoney.com , October 17, 2012; Nike Annual Report 2012.

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johnaculbreath · 6 years

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BigLaw firms’ competition from the Big Four accounting firms

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Should BigLaw firms worry about increasing competition from the Big Four accounting firms?

By Jason Tashea

September 2018

Photo by Wavebreakmedia/Shutterstock.com

Jami McKeon says she’s not worried.

Elected chair of Morgan, Lewis & Bockius in 2014, McKeon has been with the legal giant since 1981 and she’s seen plenty of rivals, competitors and existential threats to the legal industry come and go. “The legal market has always been highly competitive,” she says, “so changes we see today are more about the source of competition.”

Law firm consultants, however, tell a different story. According to ALM Intelligence and Altman Weil, law firm leaders are already losing business to this latest source of competition that McKeon is speaking about—and many more are concerned that this could be just the tip of the iceberg.

The source of competition is the Big Four.

Composed of the four largest accounting firms in the world— Deloitte & Touche, Ernst & Young, KPMG and PwC—the Big Four have, over the last decade, regrown their legal services offerings by moving beyond tax law and integrating their legal services into a multidisciplinary approach. While still small by comparison to BigLaw, a recent ALM Intelligence report found that 69 percent of law firms interviewed saw the Big Four as a “major threat.” Altman Weil, meanwhile, found in its 2018 Law Firms in Transition survey that nearly two-thirds of law firms with more than 250 lawyers consider the Big Four to be a “potential threat.”

Photo courtesy of Morgan, Lewis & Bockius

The Big Four have not been shy about encroaching on territory once considered the sole province of law firms. PwC, also known as PricewaterhouseCoopers, has even taken the additional step of launching its own law firm. Opened last September in Washington, D.C., ILC Legal provides non-U.S. legal services to mainly multinational companies through foreign-trained attorneys, according to its website. Its practice areas include entity governance and compliance, labor and employment law, global immigration, mergers and acquisitions, and financial and tax law.

“This is market-driven,” Richard Edmundson, managing partner of ILC Legal, told The American Lawyer. “Our clients are increasingly looking for advisers that can provide international coverage on transactions from planning to execution.”

The polyglot office has attorneys from Canada, England, Germany, Poland and Spain, all of whom are admitted in their own country but have “special legal consultant” status in the District of Columbia, allowing them to operate with some limitations in the jurisdiction.

While not offering U.S. legal advice, Edmundson said he believes that the law office, which is not controlled by the accounting firm, could practice American law with the right attorneys. ILC Legal did not return requests for comment.

More recently, Deloitte’s United Kingdom operation entered into an alliance with U.S. immigration law firm Berry Appleman & Leiden. Under the terms of the June agreement, Deloitte will buy BAL’s non-U.S. operations, which include offices in London, Singapore, Brazil, China and South Africa. “With the increased need for cross-border business travel, global organizations are recognizing the value of a firm that can bring a global footprint to help support the challenges of delivery and corporate compliance,” said Kalvinder Dhillon, head of immigration at Deloitte Global, in a statement.

For the time being, American lawyers need not worry much. Federal statutes, as well as state bar regulations, will keep the Big Four from offering traditional U.S. legal services. However, the current landscape hasn’t foreclosed the Big Four from growing and offering services in the U.S. and abroad, which has the potential to shake up a stagnant American legal market. Also, large accounting firms have several advantages over their counterparts in law. For clients looking to save money, there are clear financial benefits for going with a one-stop shop to handle both their accounting and legal needs. Due to complementary consulting services, which include technology and process improvement, they have the capacity to make their legal arms more agile than most, if not all, law firms.

Take Two

This is not the first time the major accounting firms have tried their hand at practicing law.

Through the 1990s, the then-Big Five—Arthur Andersen collapsed after the Enron scandal in 2002—were quickly growing their legal services divisions, especially in Europe, wrote David Wilkins, a law professor at Harvard University, and Marie Jose Esteban Ferrer, a law lecturer at Ramon Llull University in Barcelona, Spain, in Law & Social Inquiry, an academic publication.

Responding to a slowdown in the growth of their auditing portfolios, the Big Five spent the 1990s building law firms in a traditional vein. By 2001, KPMG and PwC were the eighth- and ninth-biggest legal services providers by number of lawyers, respectively, according to the Harvard Law School Center on the Legal Profession.

By the end of the century, the Big Five were threatening to enter markets they had been restricted from, including the U.S., wrote Ferrer and Wilkins.

However, after a series of accounting scandals during the 2001 financial crisis and subsequent regulation, these firms decided to pull back from offering general legal services.

At the time of the crash, Cornelius Grossmann, global leader of EY Legal based in Berlin, was working for Ernst and Young in New York City as an attorney at Donahue & Partners, a German law practice in EY’s Dutch network. He says that 2001 marked a turning point for their goals in the legal services market.

“In the past, EY tried to establish another global law firm,” he says. “When I started rebuilding the practice in Europe, I made it very clear—and that strategy followed through—that we don’t want to be another law firm.”

Grossmann explains that the law firm model was not as holistic as what EY wanted to offer, which he and other members of the Big Four describe as “multidisciplinary solutions,” a combination of legal, financial and consulting services, complemented by technology. Today, EY has 2,100 attorneys practicing in five core disciplines, including employment and mergers and acquisitions, in some 80 countries.

Similarly, Piet Hein Meeter, Deloitte Global’s Amsterdam-based managing director of Deloitte Legal, explains that their approach includes legal advice alongside improving document and process management, IT systems, analytics and other technology applications.

“That’s almost a consultative type of legal solution, rather than taking a set of facts and analyzing them from a legal perspective,” says Meeter.

While each of the Big Four positions itself as different from the others, the service offerings look rather similar. For example, this year at Legaltech, a legal technology conference in New York City, PwC representatives handed out documents that highlighted consulting services to help streamline and improve corporate legal departments. Similarly, KPMG offered services to digitize and improve efficiency of general counsel offices, and Deloitte touted its “legal management consulting.”

The Big Four also offer help with e-discovery, computer forensics and regulatory compliance.

PwC declined to comment for this story and KPMG did not respond to requests for comment.

According to the 2017 ALM report, this multidisciplinary approach has been a financial boon for the accounting firms: “All four have reported double-digit year-on-year revenue growth in recent years.”

The aggressive growth has made Big Four legal departments among the top-10 firms by revenue in France, Italy, Russia and Spain. However, the collective $900 million in revenue from the Big Four’s legal departments still pales in comparison to the $275 billion of revenue of all U.S. law firms, according to Thomson Reuters.

Nonetheless, this type of growth is a stark contrast to the reality for many BigLaw firms in the U.S., which recovered from the fallout of the Great Recession but have struggled to grow since.

According to a report released in January by Georgetown University and Thomson Reuters, demand for law firm services has been flat since 2010. Additionally, a slight uptick in attorney headcount at U.S. firms over the last five years coupled with the aforementioned flat demand means that lawyers throughout the industry are experiencing declining productivity. The study found that, across all sectors, lawyers are billing nearly 13 fewer hours per month than they were before the onset of the Great Recession.

Illustrating the decreased demand, Altman Weil’s 2017 Chief Legal Officer Survey found that 41 percent surveyed said they had cut their outside counsel budget while 56 percent increased their in-house budget.

By comparison, the Big Four have, on average, about 2,200 lawyers apiece, according to ALM. These numbers continue to grow through lateral and new attorney hires. While smaller than the 10 largest global law firms, which have 3,800 lawyers each, the Big Four offer legal services in 72 countries. Those same law firms are, on average, in 29.

This article was published in the September 2018 ABA Journal magazine with the title "Sleeping Giant: Should BigLaw firms worry about increasing competition from the Big Four accounting firms?"

BigLaw firms’ competition from the Big Four accounting firms republished via ABA Journal Daily News - Business of Law

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ntrending · 7 years

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How Deutsche Bank’s high-stakes gamble went wrong

New Post has been published on https://nexcraft.co/how-deutsche-banks-high-stakes-gamble-went-wrong/

How Deutsche Bank’s high-stakes gamble went wrong

It was the Friday before Christmas and Edson Mitchell, boss of Deutsche Bank’s London-based investment bank, was rushing home to see his family in Maine. By 5pm he was on the home stretch: his private plane had left Portland. By 5.15pm it was within sight of his destination, Rangeley airport. A minute later, in a swirl of cloud and snow, the aircraft slammed into nearby Beaver Mountain, killing Mitchell and the plane’s pilot.

That was 17 years ago. What was a personal tragedy for Mitchell’s family, friends and colleagues would also mark a moment of upheaval for the bank he had transformed. To some fatalistic observers, the crash — and its accompanying heartache — presaged the troubles that Deutsche Bank itself has suffered in recent times.

Mitchell had been a brilliant trader and an inspirational manager who, in five years, helped remodel a sleepy German lender into a Wall Street dynamo. As a fast-living chain-smoker who would bet on anything from golf to gold, he also embodied Deutsche’s big-stakes gamble on global markets. In the world of roulette-wheel investment banking, Deutsche was the highest roller of all. And for a long while the punts paid off.

More from the Financial Times: Deutsche Bank: more pain than gain under Jain Deutsche Bank gets all clear from German watchdog over triple probes Anshu Jain’s ascent was easier than time at top in Deutsche Bank

But for the past few years, despite emerging as an apparent winner from the 2008 financial crisis, Germany’s biggest bank has appeared locked in a downward spiral. Last autumn, the stock market’s alarm about the bank’s finances was so severe that investors and even government officials discussed the possibility of a bailout.

A recent note on the bank from analysts at Autonomous Research was titled “Beyond Repair”. “It’s obvious something has to be changed,” says one of the bank’s biggest shareholders. “They [Deutsche’s management] don’t understand the sense of urgency.”

Chief executive John Cryan — a bluff Brit who is the antithesis of Edson Mitchell — is resolute. “I will carry on at least until my contract ends [in 2020],” he told the Financial Times. “At the moment the job is getting more fun every day. The heavy lifting is almost over.”

Yet existential questions remain. What should Deutsche’s future role be? Will the leading financier of Europe’s biggest economy retreat to its more modest roots? Is Cryan part of the solution or part of the problem?

Deutsche Bank’s journey — from a low-profit group focused on German clients and owned by German shareholders, to the epitome of global capitalism in the heady days before the financial crisis — is an extreme version of a path followed by many banks around the world. Its fate will hold lessons for lenders, governments and regulators as the banking industry continues its post-crisis evolution.

Back in 1995, Deutsche was a staid domestic lender led by Hilmar Kopper, a Prussian farmer’s son. Wall Street names such as JPMorgan, Goldman Sachs and Merrill Lynch were expanding aggressively, thanks to booming markets, the rapid growth of financial derivatives and the advent of electronic trading. A wave of deregulation led them to Europe en masse.

Deutsche was being left behind and Kopper was losing patience with the bank’s conservative ways. He felt humiliated in late 1994 when the German government picked Goldman Sachs, not Deutsche, to lead the global process of selling Deutsche Telekom — Europe’s biggest-ever privatisation. By the following summer he had hired Mitchell — a brash but brilliant banker from Merrill Lynch — to begin the process of turning Deutsche from prosaic corporate lender into one of Wall Street’s own.

For years, the strategy worked like a dream. Deutsche steadily sold off a DM24bn portfolio of corporate shareholdings, relics of its postwar role as a pillar of West Germany’s reconstruction effort. The proceeds were used to supercharge its investment bank: first, by integrating Morgan Grenfell, a tired London merchant bank acquired in 1989; then by hiring from rivals such as Merrill Lynch; and finally, by purchasing the troubled US group Bankers Trust in 1999.

Josef Ackermann, an ex-Credit Suisse banker, oversaw Deutsche’s investment bank before becoming head of the whole group in 2002 and leading it for the next decade. He remains proud of his achievements: “We seized the growth opportunities and within a few years built a top-three global investment bank.”

At its peak in the middle of 2007, Deutsche claimed the title of the world’s biggest bank, amassing total assets of close to €2tn. Many of the world’s finance houses had been growing at unprecedented rates, but Deutsche’s expansion was faster and more furious. By June that year it was increasing staff numbers at an annualised rate of 20 per cent and assets by nearly 50 per cent. Net profit was up by an annualised 60 per cent. Deutsche’s investment bank had all its chips on the table.

The financial crisis that took hold in the second half of 2007 and accelerated through 2008 left no global bank untouched. It was an undeniably painful period for Deutsche, with a €5.7bn pre-tax loss in 2008. But compared with some rivals, the German lender was able to shrug off the crisis.

Ackermann’s statesmanlike leadership helped, as did the foresight of trader Greg Lippmann, who bet so successfully against subprime mortgages that he became the protagonist of the Michael Lewis book The Big Short, inspiring the Ryan Gosling character, Jared Venett, in the hit movie of the same name. Other executives sold subprime exposures to rivals and bought insurance against default. And the US government’s rescue of AIG, one of those insurance providers, was worth an estimated $4bn to Deutsche.

But chutzpah, judgment and luck can only take you so far. What has puzzled many who admired the bank’s handling of 2008 was just how badly the past few years have panned out. As peers have prospered, Deutsche’s fortunes have cratered. Its shares have halved over the past five years, just as those of some US rivals have doubled in value.

Eric Ben-Artzi, an ambitious young mathematician who moved to the bank from Goldman Sachs in 2010, has an inkling why. “When I joined Deutsche,” he recalls, “I thought I was joining a winner, backed by a German notion of disciplined organisation.” That impression didn’t last. “Within months I was disillusioned,” he says. He ended up as a whistleblower, informing regulators about the way Deutsche valued and risk-assessed a vast portfolio of arcane derivative securities — $130bn of so-called leveraged super-senior swaps.

“They were doing some interesting academic stuff in terms of risk modelling,” Ben-Artzi recalls. “But it was like a façade. The methodology that was actually implemented came out of thin air.” In 2015 the affair landed Deutsche with a $55m fine for false accounting.

“I blew the whistle because I gradually came to realise that this bank was only semi-legal,” says Ben-Artzi, who now works for a fintech start-up in Israel. “It was partly fear and partly a moral conscience. This was [one of] the biggest banks in the world and I didn’t want to be part of it.”

What the Financial Times has discovered through dozens of interviews with current and former Deutsche Bank employees, investors and rivals, is that Ben-Artzi’s revelations reflect a broader truth about deep-rooted problems within the bank’s systems and corporate culture: issues that can be traced back to the aggressive beginnings of Deutsche’s investment banking expansion, first under Edson Mitchell and then through the era of Ackermann and his successor Anshu Jain.

At college in 1970s Maine, Mitchell made a name for himself as a short but effective basketball player. When he opted for a career in banking, he took his competitive approach to sports into the trading room, and rose steadily through the ranks at Merrill Lynch. By 1995 Deutsche Bank had poached him to lead the buildout of the group’s still lacklustre trading operations in London. At the time, Deutsche’s investment bank was an amalgamation of a half-decent bonds business, plus a hotchpotch of operations inherited from Morgan Grenfell, the seed for Deutsche’s investment banking push sown by Kopper’s predecessor, Alfred Herrhausen.

In 1998, under pressure from Mitchell, Deutsche launched another bold move. “We had an off-site outside Rome that year,” remembers one senior manager. “And the message from Edson and his allies was clear: ‘If you don’t get stronger in the US, we will leave [the firm].'”

Within months, Deutsche had snapped up Bankers Trust, fresh from a corporate fraud scandal in which senior executives at the US group had shifted dormant customer money into the bank’s own coffers. Older hands on the board were concerned about the drift from Germany and the influence of unhealthy Anglo-American ways — but Deutsche’s globalising investment bankers prevailed.

Many who worked with Mitchell praised his technical abilities and ambition. “Mitchell was talented and aggressive,” says one former board member. Most of all, he enthused people. When he left Merrill for Deutsche, 50 colleagues followed. Rajeev Misra, who used to run Deutsche’s credit, commodities and emerging markets units and now heads SoftBank’s $100bn Vision Fund, was one of his disciples. “Five minutes with Edson and you’d walk out passionate about building a global bank. He had such optimism — the glass was always half full.”

But Mitchell’s appetite for risk was prodigious. “He had Wild West attitudes,” remembers one senior executive from that era. “[We] really had to manage him closely. If Edson had lived and become CEO maybe Deutsche would have blown up in more dramatic fashion in the crisis.”

Mitchell was only at Deutsche Bank for five short years but he left a long-term legacy. Deutsche’s investment bank became aggressive, Anglo-American, bonus-hungry and so bent on growth that regulatory relations were pushed to the limit and integrity was sacrificed. As at other banks at the time, some executives’ personal behaviour became increasingly excessive, if not out of control.

There was Mitchell’s own unconventional lifestyle — a live-in mistress at his lavish London villa, the family back home in Maine. Other managers engaged in petty corruption for personal gain, two bankers familiar with the period told the FT, including owning companies such as a limousine operator, to which they outsourced Deutsche service contracts. Sexism was rife — a busload of escort girls were once invited to a Christmas party and serviced male staff in a VIP suite. Cocaine habits were commonplace.

After Mitchell’s death, his protégé Anshu Jain, a fiercely bright pioneer of derivatives trading, was elevated to run the markets business, then the investment bank and, eventually, the whole of Deutsche. Born into the ancient Jain religion, the banker — a vegetarian and a refined family man — looked like a sharp contrast to his former boss. What united them was a fascination with the complexities of finance and a reverence for the sums of money it allowed banks and bankers to earn.

At his peak, Jain was among the best-paid financiers in the world, earning up to $30m a year, according to colleagues. As Deutsche sought to lure staff from rivals, it became known for its generous pay deals, with top traders routinely earning $10m-$20m.

Many who joined Deutsche Bank in the 1980s, 1990s and early 2000s speak of it as an “inspirational” place to work. Creativity was encouraged, results were rewarded and ambition — and risk appetite — seemed limitless. But there was a downside. “Deutsche always hired mercenaries into the investment bank,” recalls one former senior executive. “They didn’t care about ethics.” Internal competition for the same client business was encouraged on a “may the best man win” basis that could lead to toxic dynamics. “It was a mishmash of cultures,” recalls one former executive.

Behind that lay the bank’s rapid growth, the acquisition of two brokerage firms besmirched by ethical scandal and the mass import of teams of bankers from various rivals. Bosses in Frankfurt were so blinded by the success of the unit that they invested in little else. But they also failed to control it with an effective compliance function or responsive information systems. The result was great success in the boom years and deep problems ever since. It has given the current chief executive a mammoth turnround task.

John Cryan is the third non-German investment banker in a row to take Deutsche’s helm. But the dry-witted northerner who took over in July 2015 is as different from his predecessors as you can imagine. He is plain-speaking, cultured (with a passion for classical music) and geeky (he talks knowledgeably about Deutsche’s computer code and, says a friend, once helped builders rewire his London home).

Where the old Deutsche Bank stood for big bets on the markets and big bonuses to match, Cryan has stripped back high-risk business and slashed bonuses. Soon after his appointment, he said: “I have no idea why I was offered a contract with a bonus in it because I promise you I will not work any harder or any less hard in any year, in any day because someone is going to pay me more or less.”

Last year, Deutsche took the unprecedented decision to axe virtually all bonuses due to poor results. (There were “retention payments” for 5,522 “mission-critical people”.) “It was probably one of the most difficult decisions we took,” says one board member.

The lender’s previous bonus culture was hardly unique among peers. But its mismatch with performance was acute. Over the 1995-2016 period, shareholders earned a net €17bn from owning Deutsche, once dividends, share buybacks and increased stock market value are offset by capital increases. That is dwarfed by the €71bn paid in bonuses over the same time period. One top investment banker from Deutsche’s mid-1990s build-up phase, confronted with that statistic, appears uncharacteristically humbled. “Would the bank have been better off without hiring any of us?” he asks with a look to the middle distance.

For some staff, Cryan’s abstemious rhetoric rings hollow — his wife is a member of the billionaire Dupont dynasty. His core integrity, though, is hard to doubt. Former colleagues remember that during his work as an adviser to ABN Amro in 2007, the then UBS deals banker informally told Royal Bank of Scotland, ABN’s ultimate acquirer, that it should think twice about pursuing the €72bn acquisition. It was a deal that ended up destroying the now largely state-owned RBS. “He’s very honourable,” says a friend and former colleague. “He’s certainly not afraid to tell someone to abandon a plan even if it loses him business.”

Cryan’s attempts at reform sometimes verge on the sanctimonious. His refusal to meet Deutsche’s new leading shareholder — controversial Chinese conglomerate HNA — caused some friction with Paul Achleitner, the bank’s supervisory board chairman. But Achleitner, who ousted Jain to make way for Cryan, is unfazed. “John has the intellect, the dry sense of humour and the ability to call a spade a spade,” says the chairman. “That’s extremely healthy. He’s brought people down to earth from too much hype. Are bankers demotivated by that? They need to wake up and smell the coffee. He’s genuine and that’s a huge attribute in today’s world.”

Cryan has begun to change Deutsche’s substance as well as its style. Cutting costs has become one of the biggest priorities, echoing his work at UBS when as finance director up to 2011 he oversaw a near-40 per cent reduction in overheads. Deutsche’s bloated cost base — accumulated with little thought in the boom years — is still stubbornly high today. At the last count, it absorbed more than 80 per cent of revenues, double the tally of some banks. Breakneck growth in the boom years left the group with what several insiders have called “spaghetti infrastructure”. At its peak, the bank used 6,300 risk models and 108 trading systems.

Cryan is convinced the scope for savings is bigger than at UBS. “Here the cost-cutting is more straightforward because it’s an avoidance of duplication,” he says. “We employ 97,000 people. Most big peers have more like half that number.”

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tortuga-aak · 7 years

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Edison, Zuckerberg, and Bezos follow the '10,000 experiment rule' — and its secret to success comes down to math

AP Photo/Ted S. Warren

Thomas Edison — and modern day business leaders like Jeff Bezos and Mark Zuckerberg — use deliberate experimentation as their main strategy for success.

One of the most popular formulas for mastering anything says you need to spend 10,000 hours of deliberate practice to become an expert.

But deliberate practice isn't helpful in every field.

In technology and business, the key to success is in the scientific process.

The more experiments you do, the more likely you are to find a formula for success.

Deliberate experimentation is more important than deliberate practice in a rapidly changing world.

Most people think that Edison invented the first light bulb.

They're wrong.

In fact, Edison was spectacularly late to the game.

In 1878, when the 36-year-old inventor decided to focus on building a light bulb, 23 others had already invented early versions called arc lamps, some of which were being used commercially to light streets and large buildings.

So how did Edison win in such a crowded field when he was so far behind?

He and his team spent a year working day and night doing thousands of experiments.

On October 21, 1879, they succeeded, creating a light bulb for everyday use in the home.

Edison would go on to pioneer five different multibillion-dollar fields with his invention factory: electricity, motion pictures, telecommunications, batteries, and sound recording. In today's terms, you can think of Edison as Elon Musk, Jeff Bezos, and Mark Zuckerberg all rolled into one.

What was the key to Edison's incredible success? In two words — deliberate experimentation.

For Edison, building a company was synonymous with building an invention factory.

The technique is just as powerful today. "Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day," Jeff Bezos has claimed. In a recent interview, Mark Zuckerberg explained, "One of the things I'm most proud of that is really key to our success is this testing framework … At any given point in time, there isn't just one version of Facebook running. There are probably 10,000."

Bezos and Zuckerberg aren't saying that experimentation is one of many strategies. They are saying it is THE strategy.

Why 10,000 experiments beat 10,000 hours

Perhaps the most popular current success formula is the 10,000-hour rule popularized by Malcolm Gladwell. The idea is that you need 10,000 hours of deliberate practice to become a world-class performer in any field.

Research now tells us, however, that this formula is woefully inadequate to explain success, especially in the professional realm. A 2014 review of 88 previous studies found that "deliberate practice explained 26% of the variance in performance for games, 21% for music, 18% for sports, 4% for education, and less than 1% for professions. We conclude that deliberate practice is important, but not as important as has been argued."

This means that deliberate practice may help you in fields that change slowly or not at all, such as music and sports. It helps you succeed when the future looks like the past, but it's next to useless in areas that change rapidly, such as technology and business.

Wikimedia Commons/Library of Congress

What Edison and others (see more examples below) teach us is that we should maximize the number of experiments, not hours.

Instead of the 10,000-hour rule, we need what I call the 10,000-experiment rule.

Throughout history, the scientific method has arguably produced more human progress than any other philosophy. At the heart of the scientific method is experimentation: develop a hypothesis, perform a test to prove the hypothesis right or wrong, analyze the results, and create a new hypothesis based on what you learned. The 10,000-experiment rule takes this proven power of experimentation out of the lab and into day-to-day life.

Following the 10,000-experiment rule means starting your day with not just a to-do list but a "to-test" list like Leonardo Da Vinci. According to Walter Isaacson, one of Da Vinci's biographers, "Every morning his life hack was: make a list of what he wants to know. Why do people yawn? What does the tongue of a woodpecker look like?"

As you go through your day, following the 10,000-experiment rule means constantly looking for opportunities to collect data rather than just doing what you need to do. It means adding a deliberate reflection process based on reviewing data before the day ends.

For example, do you want to improve your sales results by asking a new question at the end of sales calls? Now every sales call becomes an opportunity to ask that question and collect data so that you can learn how to make better sales calls in the future. Do you want to sleep better so that you can have more energy during the day? You can research all the best practices for falling asleep, turn the most compelling ones into a routine, use a sleep tracker to get objective data on the quantity and quality of your sleep, and then make adjustments to your routine to improve the results.

To achieve 10,000 hours of deliberate practice requires three hours of deliberate practice per day for 10 years. I argue that the 10,000-experiment rule is just as difficult, yet doable, requiring three experiments per day.

Why 10,000 experiments yield success, according to decades of academic research

If Edison's approach is universal, you would expect it show up repeatedly among top performers. As it turns out, the academic world has been studying the phenomenon for decades, and that's exactly what they've found.

Researcher Dean Keith Simonton has spent his career studying the world's preeminent creative achievers and painstakingly dissecting their careers to find patterns. To share his findings, he has published more than 340 academic articles and 13 books, including "Greatness: Who Makes History And Why" and “Origins of Genius: Darwinian Perspectives on Creativity."

Two fascinating insights have emerged from Simonton's (and others') research. The first is that most innovative ideas are generated by a small number of superstars. In any given field, the top 10% of performers produce more than 50% of breakthroughs.

Why are these superstars so much more successful? Is it because their ideas are just superior from the get go? Here's what is really fascinating: The answer is no. The second lesson to learn from Simonton's research is that superstars produce just as many bad ideas as everyone else — they just produce more ideas overall. Having many more ideas means they have more failures but also more hits.

"What is especially fascinating is that creative individuals are not apparently capable of improving their success rate with experience or enhanced expertise," Simonton has written. "Creative persons, even the so-called geniuses, cannot ever foresee which of their intellectual or aesthetic creations will win acclaim."

In other words, the key to maximizing creative success, according to the theory, is producing more experiments.

Editorial Note: For a more nuanced understanding of the Blind Variation And Selective Retention, you can read Simonton's 2011 Academic Paper, Creativity and Discovery as Blind Variation: Campbell's (1960) BVSR Model After the Half-Century Mark.

From health to stand-up comedy: The 10,000-experiment rule applies across fields

When you consider many of the most important achievements across different fields, you often see this theory at play.

A Fast Company article written by advertising legends Ben Clarke and Jon Bond points out that thanks to a combination of new technologies and lean business approaches, the world's most innovative businesses are running thousands of experiments more annually:

Courtesy of Michael Simmons

In academia, Einstein is best known for his paper on relativity, but he published 248 other papers. Paul Erdos coauthored more than 1,500 mathematical research articles during his career. 1,500! As you might expect, Erdos made significant contributions, and although most of his papers have been forgotten, a handful of them made him one of the most influential mathematicians of the 20th century! Now consider that fewer than 1% of scientists publish a paper every year.

In the world of entertainment, SNL, one of the longest-running TV shows in history, has a grueling weekly experimentation process of brainstorming, researching, and rewriting scripts. Only a tiny percentage of sketch ideas ever air. The iconic cartoons published by The New Yorker are the result of a process in which 50+ freelancers submit up to 10 sketches each for consideration per week:

Courtesy of Michael Simmons

Pixar, one of the most successful movie studios in history, developed 100,000+ storyboards (i.e., step-by-step plot sequences) for the film Wall-E's ultimate plot. 100,000!

Those who enthusiastically embrace experimentation in their personal lives tend to reap significant benefits as well. Take, for example, Shonda Rhimes, producer and writer of Grey's Anatomy, Scandal, and other hit shows. She set up an experiment she called "The Year of Yes" to confront her debilitating social anxiety, limit her workaholism, and accept herself. Instead of continually saying no to social experiences, she committed to saying yes for an entire year. Among the many lessons she learned from the experience was that to know what to focus on you first need to try many things.

Entrepreneur Jia Jang took something most of us fear — rejection — and made it into an experiment with his 100 Days of Rejection project. Every day for 100 days he forced himself to do something socially awkward, where the result was likely to be rejection (i.e., asking to play soccer in someone's backyard), all while video-recording himself. Journalist Elizabeth Gilbert quit her job and marriage and then spent a year traveling the world to discover herself. She divided the year into three experiments: eat, pray, and love. Her experience turned into a best-selling book and movie. Young entrepreneur Ari Meisel used data and experimentation to cure his Crohn's disease, which his doctors said could not be cured.

Understanding the math: If you can do enough experiments, success is virtually guaranteed

If experimentation is so powerful, why don't more people do it?

I say that there are a few reasons…

First, we live in a culture that is obsessed with productivity: getting more done and less time, systematizing, automating, and even outsourcing. If one has a frame of short-term productivity, then taking time out of your day to nurture a creative process with unpredictable results that don't pay off immediately is extremely hard. What is productive in the long-term often feels not productive in the short-term.

Also, performing experiments is time intensive. To squeeze out some deliberate learning every day requires at least 15 minutes, but even more challenging is that most experiments fail. While failure is increasingly celebrated in our society, most people still have a visceral feeling of shame and disappointment that comes from it.

It wasn't until I understood the math behind experimentation that I was able to get past my fear of failure.

1. If you do enough experiments, the odds are in your favor. The quality of each subsequent experiment increases because you will tend to apply the lessons learned from previous experiments. Those lessons make your success curve exponential rather than linear.

Courtesy of Michael Simmons

2. One big winner pays more than enough for all the losing experiments, as Jeff Bezos explained in a recent SEC filing:

Given a ten percent chance of a 100 times payoff, you should take that bet every time. But you're still going to be wrong nine times out of ten. We all know that if you swing for the fences, you're going to strike out a lot, but you're also going to hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in awhile, when you step up to the plate, you can score 1,000 runs.

3. Today's tools allow anyone to increase their quantity of experimentation by an order of magnitude. A new breed of affordable apps, services, and trackers help us learn about what works for other people, collect data on ourselves, interpret it, stay accountable, and track our progress in real time. In the health space, for example, these new tools have led to the biohacking and quantified self-movements where people use blood glucose levels, sleep, activity, heart rate, gut biome, and genetics to facilitate their experimentation. Similar experimentation explosions are happening in the world of relationships, sexuality, intelligence, happiness, productivity, and personal finances.

If so many people across so many fields can incorporate deliberate experimentation, so can you!

Edison didn't intend to just be more inventive. He created an experimentation factory to guarantee that he and his team consistently released new inventions. Edison's goal, for example, was one minor invention every 10 days and one major invention every six months. When he was on the edge of a major breakthrough, such as the light bulb, he had a unique process called drag hunts in which he would generate and test hundreds, even thousands of possibilities.

So what could the 10,000-experiment lifestyle look like for you?

I recommend taking two steps now that could change everything for you.

First, identify at least one jackpot experiment that could change your life. The road to deliberate experimentation starts with one experiment, but not all experiments are created equal. Some experiments are extremely time and money intensive. Some create incremental changes, while others could be life changing. Some have a 1% chance of success. Others are a sure bet. When picking a first jackpot experiment to pursue, you want to pursue an experiment that is easy to do monetarily and timewise, has the potential to be life changing, and carries a reasonable probability of paying off. I call these Jackpot experiments.

Second, I recommend running three experiment tests each day.When you start the day, identify three tests you want to perform. Collect data throughout the day, and before the day ends, analyze the results.

Try this for one month, or 30 tests, and see the difference it makes!

Thank you to Ian Chew and Shizuka Ebata for reviewing the article. Special thanks to Eben Pagan for reviewing the article and coining the phase ‘10,000-experiment rule.'

If you're interested in really taking action to become a deliberate experimenter, we spent dozens of hours creating a free mini-course that includes several email lessons and a webinar to help you be successful with the 10,000-experiment rule.

NOW WATCH: What it's like to fly on North Korea's one-star airline

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anchorarcade · 7 years

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Meet China's new top leadership — Quartz

http://ryanguillory.com/meet-chinas-new-top-leadership-quartz/

Meet China's new top leadership — Quartz

In the grand finale of China’s most important political event, six men, led by the all-powerful party chief Xi Jinping, strode onto the stage of Beijing’s Great Hall of the People to meet the press Wednesday (Oct. 25).

The unveiling of the new Politburo Standing Committee (PSC)—the Chinese Communist Party’s very top rung of power—came a day after the party’s 19th national congress concluded. The twice-a-decade leadership reshuffle saw Xi further consolidate his power, with his name inserted into the party’s constitution, an honor no Chinese leader has enjoyed while still in power since Mao Zedong.

The composition noticeably includes no one in their fifties—that is, young enough to be Xi’s successor as party chief in 2022, when he is due to step down. That’s a signal Xi could break with convention to hang on to power beyond his second term. Less unusually, it includes zero women.

Xi and premier Li Keqiang, the party’s No. 2 official, retained their spots as expected while the rest five in the apex group were elevated from the broader 25-strong Politburo. These new faces are seasoned politicians who as a group appear to strike a balance between Xi allies and others. Their specific government or party positions, for the most part, have yet to be announced.

Here are profiles of the seven most powerful people in the Communist Party, in the order of seniority suggested by the sequence in which they trooped into the Great Hall of the People.

Xi Jinping (China Daily via Reuters)

Xi Jinping, 64, party general secretary and China’s president

Political alignment: Xi started out as a princeling largely accepted by all party factions after the dramatic fall of his leadership rival Bo Xilai. Five years on, he is immensely powerful, and has installed his own men—some considered part of the Zhejiang clique—in key party and government positions.

Known for: Having waged a war against corrupt officials and won official recognition as the party’s “core,” Xi became China’s most dominant leader in decades in his first term. Now he has emerged from the party congress on par with Mao and reformer Deng Xiaoping, with his own name added to the party’s constitution. During the leadership conclave, Xi also declared a “new era” for his country, which entails the idea that China is moving closer to the center of the global stage as an influential power. Xi’s career trajectory has involved a steady ascent through the ranks of the party, ambitious global-facing infrastructure projects, and ruthless crackdowns on political opponents and dissidents.

Policies: An optimistic take on Xi’s power play would be that it’s a way for him to be better placed to deliver on big promises, such as greater prosperity. Critics, however, don’t expect him to do a lot to address China’s structural economic problems, such as excess industrial capacity and rising debt.

Li Keqiang (EPA/Wu Hong)

Li Keqiang, 62, party #2 and China’s premier

Political alignment: Li advanced through the Communist Youth League, once an influential training ground for party high-flyers, including ex-president Hu Jintao, that has now been sidelined.

Known for: Li is the weakest Chinese premier in decades. Although he is nominally the party’s No. 2 responsible for steering China’s economy, Xi has effectively taken away much of Li’s role by himself serving as the head of a series of party groups that guide economic and financial affairs. A trained economist, Li has made little headway in the much-needed economic reforms the government has promised. Instead his past five years as premier have been marked by a growing debt bubble and an epic stock market meltdown in 2015, among other crisis. Speculation had been rife that Xi would replace Li as premier.

Policies: Li seems likely to hang on his premier job after all (the shuffle of government posts only begins around March). But how much say Li has on the economy depends on Xi. As the Economist notes, “it may prove useful for Mr Xi to retain him as a fall guy, in case a bigger crisis hits.”

Li Zhanshu (Reuters/Jason Lee)

Li Zhanshu, 67

Political alignment: Li is one of Xi’s most trusted confidants, essentially serving as the president’s chief of staff since Xi took power in 2012.

Known for: Li got his name from the phrase zhandi jiashu—which means “a letter from the battlefield”—a reminder of his family’s extensive ties with the Communist Party during wartime. Li spent decades of his political career in China’s poorest areas including the rust belt province of Heilongjiang and the southwestern farming province of Guizhou, which has proven to be a poverty-fighting test ground for the party’s rising stars. During the 2012 power transition, Li replaced Ling Jihua—a Hu Jintao ally who was later sentenced to life in prison for corruption—to head the General Office of the Communist Party, which is responsible for the daily administrative affairs of senior leaders. He was also elevated to the 25-strong Politburo, a position Ling never earned.

Policies: As Communist Party watcher Zi Yang notes, Li pushed for heavy investment in infrastructure and cutting bureaucratic red tape for private businesses back in his days in Guizhou; as Xi’s chief of staff, he has gone beyond his day-to-day brief when it comes to foreign affairs, accompanying Xi to visit world leaders such as Vladimir Putin and Donald Trump.

Wang Yang (Reuters/Jason Lee)

Wang Yang, 62

Political alignment: Wang was nurtured in the Communist Youth League.

Known for: Wang currently serves as one of China’s four vice-premiers, in charge of agriculture and foreign trade. Prior to that, he had taken some of the country’s most important regional leadership offices: he was Chongqing’s party boss between 2005 and 2007, and party boss of the southern Guangdong province between 2007 and 2013.

Policies: Wang is largely considered a more liberal leader in the party’s ruling elite. During his tenure in Chongqing, Wang urged local media to focus more on ordinary people rather than municipal officials in their coverage. In Guangdong, he pushed for greener, more sustainable economic growth (paywall). He also won praise for allowing Guangdong’s fishing village of Wukan—once hailed as a cradle of grassroots democracy in China—to elect a new local chief amid a series of protests in 2011.

Wang Huning (Reuters/Jason Lee)

Wang Huning, 62, Secretary of the Central Committee Secretariat

Political alignment: Wang is considered part of Xi’s inner circle.

Known for: Wang has been a senior policy advisor to Xi and his two immediate successors, Hu Jintao and Jiang Zemin. “Huning” literally means “Peaceful Shanghai,” where he was born and spent most of his academic career as a political scientist specializing in US politics. After travels in the US, he published a book in 1991 criticizing the US political system called “America Against America.” Currently heading the party’s Central Policy Research Office, he is considered the brain behind Xi’s “Chinese dream” campaign. Like Li, Wang is also a routine member of Xi’s overseas entourage.

Policies: Wang’s diaries from his early academic career, published by Chinese media last year, revealed that he is an advocate of “neo-authoritarianism,” the doctrine that holds that political stability is fundamental for economic development, and that democracy and individual rights should come later when the time is appropriate. He also argues for a more assertive foreign policy, one Chinese scholar who’s known Wang since the 1980s told the Wall Street Journal (paywall). Wang is now the first-ranked member of the party secretariat, which helps carry out decisions of the Politburo and its Standing Committee.

Zhao Leji (Reuters/Jason Lee)

Zhao Leji, 60, the party’s new top graft buster

Political alignment: Zhao is considered not to have any strong factional affiliation.

Known for: Zhao currently serves as the Communist Party’s personnel chief. He spent more than three decades climbing the political ladder in Qinghai province until he became the western region’s party boss in 2003. He was transferred to the same post in Shaanxi province in 2007. He is said to have a poker face, and also described as media shy and largely uncharismatic.

Policies: Zhao was selected Tuesday (Oct. 24) as a member of the party’s internal discipline watchdog, and has officially replaced Wang Qishan, a trusted ally of Xi who is no longer in the Standing Committee, to serve as his anti-corruption tsar.

Han Zheng (Reuters/Jason Lee)

Han Zheng, 63

Political alignment: Han was once considered part of ex-president Jiang Zemin’s faction.

Known for: Han has spent his entire career in Shanghai, a powerbase of Jiang’s. At age 48, Han became the city’s youngest mayor in five decades. Han has proven to be a political survivor of a 2016 pension-fund scandal that brought down his immediate boss. He served under Xi, then Shanghai party boss, for eight months in 2007 before Xi headed to the central government. During the 2012 power transition, Han himself was promoted to become Shanghai’s party chief, a position that traditionally secures a seat in the PSC.

Policies: Han has overseen Shanghai’s free-trade zone trials and other experiments of financial liberalization.